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tv   The Call  CNBC  February 10, 2010 11:00am-12:00pm EST

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in today's street poll we asked if you think we should get a rebate on our everyday taxes washington shuts down. >> okay. 69% of you said yes. 31% of you said no. is that what you would have thought, mark? >> i would have thought it was closer. i would have thought -- because i understand a lot of people have been e-mailing in and saying things like i'd pay extra to keep them shut down. >> oh, there is that angle. >> one person wrote in, how about we close the government every day, but the problem is it costs us money. you have to pay them anyway. sot does cost us, we're not saving money by closing the government. anyway -- >> plus you've got millions and millions of people that work for the government. if you didn't pay them then they don't spend money. >> you've got to pay them.
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it is hovering around 12,000 level and we've come off the bottom. we're recovering here. i have to tell you here, the market breadth is stinky. it's a lot more hughesers than winners so it's not a real good market today. what are you going to do? are we out of time? we're out of time. >> mark on. >> we're out of time, but more fortune 500 companies located here than in any other state. we're going to be talking to a few of them this afternoon as well as cyber security, fastest growing industry in the country. we'll talk about all of it coming up on "street signs" live from theal me. have a good day, haynes. >> good morning, everyone. welcome to "the call." i am trish regan and we are 09 minutes into today's trading. market lower amid ben bernanke's comments and we'll talk about the fed's exit strategy and what it means for your money right now. hey there, larry. >> hey, trish. i'm larry kudlow, conflicting reports on whether there's a european plan to bail out
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greece. we'll have a live report from brussels and we'll discuss what needs to be done right here. good morning, melissa. >> as toyota's problems mount we ask are cars just too overengineered and sophisticated computers doing more harm than good. this is "the call" on cnbc. it looked like it was going to be a positive day on this snowy morning in new york city as traders remained optimistic that there would be a bailout for greece, but then germany said there was no imminent plan and the rallies stalled and after ben bernanke announced the fed's exit strategy. take a look at how the s&p 500 is trading. it is down seven points on the day and it's two-thirds of a percentage point. take a look at the dow, it's down 59, almost 60 points and that's 0.1% and sitting below the 10,000 mark and the trading
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down 0.6%. trish, what's happening on the floor today? >> hey, there, melissa. like you said, we've got a snowy day. there was an expectation that things might look a little bit better, but we have conflicting reports right now on greece. that's creating a little confusion and nervousness, combined, of course w the fed. ben bernanke signalling that the discount rate may rise in the future and so you get nervous and it is off 60 points right now. bertha coombs with me on the floor today. i want to bring her in and a real concern, think, is financials in all of this. bank stocks. how are they reacting to the fed's statement? >> ultimately what was in the bernanke statement was not a surprise and you have to look at it, if you want to be constructive in this market as good news. the fed has to have an exit strategy, so the banks today have pretty much been holding up and some of the european banks had fallen off early in the morning when they thought there wouldn't be a greek situation. we'll get more clarity on.
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so for now the banks are actually one of the strong points. >> it's a good point you made because you would think investors would say, okay, at some point you can't keep the zero interest rate policy going forever and at some point you want to have a plan. you want to have some kind of thing that you can act upon. let's talk about the dollar and the dollar looking stronger. he has a chart where he keeps looking at the s&p versus the dollar. it's been so choppy this morning because of the euro moving on the issue of greece, the dollar has been moving as well, correspondingly, so commodities and energy have been under pressure. energy especially, exxon, chevron are one of the biggest drags. natural gas and oil explorer, eog resources, one of the big losers. in the metals and mining, again, zee this question about one of the peoples are talking about is this economy is it stimulus driven? is it just a replacement driven so far? steelmakers are hard hit this morning because you have bhp
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billiton and both of them saying they see soft commodity prices and soft steel prices and offering a cautious outlook in that sector. >> finally before i let you go. hang on one second. we havic braing news right now from phil lebeau at the auto show in chicago. hi there, phil. >> hi, trish. we are joined first with a cnbc interview, with president for ford motor company. you were just here interviewing the new electric transit connect as well as a redesigned edge. for you guys this is an interesting auto show because a lot of people are saying down markets are not a good time for the auto markets. >> we've been investing and bringing the plan and the pipeline is very full pf our market share is growing so we're using the chicago show as another ven tou introduce more great new product in the marketplace. >> it seems like groundhog day for you and me. met in l.a. and the big story dominating there was the nomination of fritz henderson at
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gm. the show here, everyone's talking about the troubles at toyota. i know you don't want to comment on another automaker's situation, but there is the question of how do the domestic automakers capitalize on this, for lack of a better term, steal back customers they lost over the last 10, 15 years? >> i can only speak to ford. we continue what we've done over the last years, focus the customer, bring product have quality, safety and technology. the good news is since october 2008 our market share has risen every month with the exception of one and that's on the back of bringing out great products so we'll continue to do the same, stay focused on not get distracted and keep listening to the customer. >> how much do toyota's troubles churn the market? in other words, customers going after toyota are now up for grabs, you now have a chance. is there a percentage you put out there that you say we have a chance to take x percent?
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>> there are lots of goings on as you look at the websites in terms of how customers are shopping and who they're looking at. i think from our standpoint, our strategy hasn't changed which is just get our message out on the new products and let the chips fall where they may and the market is going to be the market. we just want to make sure that we get our fair share and that will be up to customers coming out of the showroom and being surprised by what they see. >> mark fields, joining us on a day when they introduced an electric, all-electric, as well as a redesigned edge. >> the market moving a lot this morning on a significant speech from the fed on policy. fed chairman ben bernanke giving us some of the details and steve has more on that. >> it was a significant speech, melissa, on policy from the fed chairman detailing how the fed will reduce or get out of the incredibly easy monetary policy put in place during the financial crisis and the market reaction, it would signal it
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would happen sooner than when he thought, here are the keys to the exit strategy and the keys to what fed chairman ben bernanke said. they'll raise the discount rate before long. it may be sooner rather than later. he'll target interest on excess reserves and that's the new benchmark for fed policy and not fed funds at least for a while. it will target reserve balances possibly. it is what bernanke was saying that these changes do not signal a change in monetary policy and made a point to emphasize the fed policy when the fed stayed in january. interest on excess reserves was listed as one of the things that would become the new benchmark. reverse repos looking for new counterparties may use mortgage-backed securities in those reversed repos. he has the term deposits and think about cds for banks and ways to soak up excess reserves and, and he talked about selling
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assets and not clear yet and certainly not in the near-term. in the near-term the fed is likely to let agency and mortgage-backed securities roll off while it replaces treasurys that mature, but that won't always be the case. he suggested the bank could also allow treasurys to roll off and could eventually sell mortgages if economic conditions warrant. any mortgage sales, he cautioned, would be gradual. this was testimony the fed chairman was supposed to deliver at hearing today. it was canceled, because of the snow and clearly they felt it was sig nif kant and urgent enough, and larry, my takeaway from that is that this thing of a discount rate will happen sooner than maybe the market thought. they wanted to give a lot of time for the market to know this was going to happen. who knows? >> that by itself is not a tightening. he's talking about a spread. there's no borrowing at the discount window, what is so fascinating to me, steve, the
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fed watching may change. the fed funds target may not be the important deal. the important deal may actually be the paying interest on excess reserves and secondly, an old monitorist argument that they'll be targeting the volume of reserves. that's the old monetary basis. >> back on the 19th of january we had that very story and the fed was going to make that change from the fed funds rate to the new benchmark which is interest on reserves. it's just a fact of life and there's nothing the fed can do about that. as for balances, larry, there are some economists who writes in when we had the old regime, was there more volatility than interest rate asks maybe yet fed moved away from that was because of interest rates. >> let's talk much more about bernanke's exit strategy from the fed. joining us is diane swonk, chief economist of mesereau financial and rick santelli. the touch of root canal from ben
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bernanke. what's your take? what did you hear? what's jumped out at you on the world and planet earth. >> some say they'll be smoking next week and others say they'll go on a diet next week and others say they'll modify it. i look at it the same way. it's tightening. i don't think anything's changed. i think it's fine that they have a plan, but i think most traders plan on not see anything tightening any time soon. >> i think the point rick is trying to make is that they need to re-establish credibility here? do you think they're able to do that? >> i think that's definitely what's going on, is they're rying to do that especially over the hoopla over ben bernanke's reappointment. the fed has to look like they're on top of things and releasing this speech at this point in time even though government is closed was also this attempt. ben doesn't have to answer the terrible questions right away when he gives a speech right now and this is an attempt to put
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the fed on top of their game. they're conducting policy independent of what's going on in congress. >> rick santelli, one more for you in terms of trading. there's a lot of talk coming out of china that the chinese will not buy any more mortgage-backed securities and may start selling them, that's number one and number two, if the federal reserve starts selling mortgagebacks, bill gross isn't going to buy them because if the rates go up the duration will change. aren't these important complications to the fed? how are they going to drain reserves if they can't sell this 1.25 trillion of mortgage securities. >> you believe that? >> first of all, 1.3 billion people and how do you know they're listening with the right spokesmen when they come out with these stories. there's a lot of talk out there. i think they should have modified their mortgage or agency purchases in the fall of '08, frankly, but i think some of the changes to freddie and fannie and the probable
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inability to divest themselves of some of these positions from the fed perspective, i think it's an interesting talking story, but i think what you're really getting at is accumulating and stabilizing markets is a lot easier than trying to extricate from those positions. >> steve, before we go, do you think targeting the interest on excess reserves is more effective? is that the more effective strategy than the fed funds rate? >> the fed doesn't have a choice. the fed funds rate is this big and the interest is $1 trillion. as to what will matter and what will be the number one tool for determining is not the fed funds market anymore. it trades to 12% interest on reserves and the reason is the spillover from gses and all sorts of technical reasons. the bottom line is the fed has no choice for at least a time. it must make the interest on reserves. >> the real issue is the old-fashioned way by selling bonds and pulling cash out of the economy. diane, let me ask you on the way
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out. we're running out of time. you talked about the politics of the congressional hearing and so forth. bernanke got roughed up pretty good. is there a consensus to tighten fed policy unless the unemployment rate miraculously falls by 1 p 1.5 percentage points. is there really a consensus, diane? >> no. that's the bottom line. the fed laid out important exit strategies and they're although the markets are reacting that it's sooner. the reality is they're not going do anything until the economy improves significantly more than where they're at. >> i think that's exactly right. >> thanks to all three of you for joining us. trish over to you. >> we have a market that's reacting and certainly bernanke's testimony has weighed on stocks today and then there's of course, the greek debt fear factor. are we due for a full blown correction? it's the bull versus bear debate coming up next, larry? >> something washington and wall
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street both have in common, a snowstorm wreaking havoc on the east coast. the business forecast and travel picture coming up only on "the call." we're doing snow, we're doing weather, we do it all.
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hi, folks. welcome back to "the call." i'm matt nesto tracking stocks moving in real time.
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i turn your attention to activision blizzard, atvi, why might you ask? it's the strongest stock in the market right now that will be reporting earnings after the close. it is up almost 2% as we speak. the stock has been stuck around $10 a share and has been drifting. it's up about 5% since it it last reported, but 43 cents on $2.2 billion are the estimates that are out there right now. interestingly, the stock has grown enormous compare to its closest rival arts. it's 2.5 times larger and piper jaffray posting comments in "the wall street journal." watch for activision as we go for the after the bell earnings. >> indeed we will. stocks are returning to their losing way. the question are we headed for a full blown direction? we want to ask mike rabin on, and scott ludu, director at fifth third asset management. boy, am i glad you guys here
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today because we have a lot to discuss. we have the fed's exit strategy and the greek situation wing on this market right now. where does it leave you as an investor, mike? >> i think it's a very tricky time. either the market does correct full blown at this point or we see one more small pop to the upside before the real issues of deleveraging hit later this summer with all of the mortgage resets that are coming down the line. >> you're a bear. down the line, you think that this market is, in fact, due for another correction. >> if it's not in trouble now, it's due for some real big trouble. if the subprime mortgage crisis caused all of the problems in the market that it did, the millions and millions of dollars of prime mortgage resets are going to start occurring later this summer and early this fall. >> you're talking about something -- i think that is an issue, but let's talk more about the here and now. scott, i'll go over to you. i mean, when you look at what's going on in europe right now, when you look at the sovereign
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debt crisis a lot of people have said, you what? you can make some kind of comparison to the situation we saw previously with the subprime crisis and that there are some similarities in this. if we do not see a bailout from germany, from the eu for greece, what happens next? >> well, i mean, i just don't think greece is that big of an issue. i think that will be taken care of in the scheme of things. so to me, i think this is a great opportunity to buy u.s. equities in particular, it's giving us the correction and that and, un, the fed is going to tighten some day. gee, let me show you my surprise face. duh! so i think these things are going to happen. everyone knew they were going to happen. >> and scott, what you've got this morning is they're mostly blowing spoke at us. i think rick santelli was right, it ain't going to happen soon. we should be wear begermans
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bearing gifts to greece. on the outlook for stocks and the correction. we've already had what? 7% correction. >> yeah. >> with this record, steep upward sloping yield curve which infers good corporate profits and good economic growth have we ever had a crashing stock market with this kind of positively upward sloping yield curve ever in the history of man even going back to 450 b.c. when greece peaked? no, we haven't. not only that. let's be honest. corporate profits this quarter have been absolutely stellar. there's no question about it. the numbers are good and the numbers have gone up and i think when companies report q-1 in april we'll have a third of 2010 in the rear-view mirror and that will paint a better picture and i just don't see how the stocks go up dramatically and it would be different if we're sitting at a 20 p-e multiple. >> i want to get mike's point. >> want to get mike the bear's take. >> mike, you were saying just
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earlier that the mortgage resets are a significant issue as we get further and further into what many believe is a recovery now. that is going to be the thing that derails this market? >> well, really getting back to what was said earlier, the point of a steep yield curve suggests that traders are worried about inflation. inflation needs velocity. velocity needs spending. there's no such thing going at this point, and i think the fears of inflation are unfounded and what we have is a deflationary environment as greece proves and the whole bail out nation is headed to the world. they'll make the problem worse which is why this market will fail. >> i agree with you. i hate it, in the short run, i don't want like the long run pictures. i don't like the long run policies and i don't like bailout nation and the taxes that i think have held up the market, but i just want to put on the table what's your take to
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the positive-sloped curve? because usually, historicicly, going back cycle after cycle after cycle, unless shom rates rise substantially and flatten the curve, you have a bull market stock scenario, mike. that's what i'm saying. short term. >> i was going to say, hang on real quick, larry, it's like you're trying to have your cake and eat it too. on the one hand -- >> i'm eating the icing off the cake. when i open the cake in 2011 it's going to be sour. i'm not going to like the cake. all i'm saying is the icing in 2010 still looks pretty good to me, mike. this is america, we can have our icing. >> on the most positive side i might be able to see the market rising for the next couple of months somewhere to the area of 11, 11-3, but that's the highest it can go. >> that's all i'm going for. i just wanted to bring that out. >> the icing sure tastes good. thanks so much. we appreciate it. >> there's icing on the streets right now. >> there sure is.
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>> when we come back, conflicting reports on whether the european union is going to bail out greece, this as eu leaders head to belgium for a summit tomorrow. >> i'm just saying 2011 could be a big problem, but it's only february 2010. we'll have a live report from bruss brussels on the greek thing ask we'll discuss the bailout opportunities not only for greece, we have spain, and we have portugal and eastern europe and california and we've got new jersey, and new york, bailout nation. you're watching cnbc first in business worldwide.
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china has indicted employees of rio tinto on charges of bribery and stealing business secrets. the four could face up to 27 years in prison. rio tinto is down 2.25%. 27 years in a chinese prin, that's ugly. jean paul is heading to the brussels summit. this on conflicting reports that a bailout package for greece is imminent. we have carolina chimeti is live with the latest. carolina, what can you tell us? >> hi, larry. what i can tell you is that a
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couple of minutes ago i was talking to a european union official and what he told me is he would bet his own money on the notice that there won't be a bailout coming from the euro zone, from the european union to greece tomorrow. it's not going to be announced tomorrow according to this eu official. he told me that he sees a bailout as a loan given to greece and as that guarantee to greece. if there will be, for example, maybe german banks buying greek debts or greek bones to give more time to the greek government to work on its reforms, that is another deal. that is not seen as a bailout by this eu official and that would be, of course, very good news to some u.s. banks as well as the u.s. -- all of the u.s. banks have combined $176 billion in exposure to troubled european countries, not only greece, but also portugal, spain, greece and ireland. another thing that i'm hearing is the finance ministers of the
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european union were on a conference call earlier this afternoon to decide to make a very strong statement tomorrow backing greece and giving more time to the greek government to work on their reforms, especially under pension reforms and maybe cutting some public wages before they go ahead and create a bailout for greece if it's needed. melissa? >> thanks so much. let's talk more about this potential bailout and whether it will need to any even further than greece and whether it will even happen from across the pond. joining us now is simon derek, bmi mellon and a cnbc contributor is with us as well. simon, let me start with you. what do you think about this latest report that there may not be a bailout and also one of the big questions is is this just the beginning? is greece like bear stearns and we'll see other countries coming to the trough? what do you think? >> i think we have a way to go on the european union from a coordinated response to this. in fairness, clearly, some
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driven politicians have the line, but by the very fact that they've raised the idea of a bailout is too late to get back. however they do it, they've got to come up with something to support greece because if they don't that's going promote a flight or capsule away from that. here's the thing, if you provide a guarantee to greece. let's just say that's ultimately what comes out of it. if you provide a guarantee to greece you're giving them german sovereign debt status. you have to do the same thing for portugal. you have to do the same thing for spain because if they don't, investors will go elsewhere. >> end, what do you think? is this just the beginning and we're looking at protesters here who are protesting the fact that greece is trying to clean upst own situation a little bit and at least cut back on spending. they're facing so many protests. is this like bear stearns and who would step in in the end to be the ultimate savior? god? i mean, they don't have the u.s. government to come in and save all of the banks. who's going to come in.
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>> that's the italian issue, god. the vatican. >> under the lisbon treaty section 122, they do have the ability to step in under exceptional occurrences beyond the control of the government. this is somewhat similar to the section 13b for the federal reserve of exigent circumstances. if there's a wherewithal and a consensus for doing something, they'll do it. as far as greece goes, there's been discussion on whether the imf would step in and so on. i think what the eu is waiting for is to see if greece can actually pass laws that say they'll reduce or freeze wages in greece without it imploding into strikes and civil strive. that's really what they're trying to do. >> they don't have the power to do that part, andy, i think if that's right. can we just clear up something on the report? there's some confusion between the loan guarantees and the term bailout. loan guarantees would guarantee the sovereign debt of greece, and i'm assuming the rest of the
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countries, portugal, spain, italy are on loan, too, but loan guarantees will do the job. is that what we're seeing here? >> i think that's somewhat of the key. it will certainly comfort investors. you know, we saw a fairly large rally today of about 45 to 50 basis points and grooek backed down closer to german debt and on news that perhaps the bailout -- or a guarantee was going to happen. just anything to provide comfort for debt holders, i think is key. one other thing i want to point out is this whole concept of too big to fail, whether it's a country or in the united states this is something everybody is struggling with and just today we had one of the ratings agencies downgrade or i should say yesterday or warn, not downgrade, that citigroup and b of a could be downgraded if the united states comes up with too big to fail and allows entities to be unwound. that's to some extent where we're getting at with greece. >> simon, does someone need to
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learn a lesson here? didn't greece juice their own country and their own gdp by spending three times the rate as the rest of the euro zone? now the bill has come due and they want a bailout? i mean, is there a larger lesson in here? can we afford a larger lesson? >> yes, there is a larger lesson and that is always spend within your means. unfortunately, time after time in europe that has not been the message. unfortunately, the real message is they should have gone for fiscal unions ten years ago and that perhaps really the message is that germany's learning the hard way that if you have a currency union, hey, you need to help fiscal union at the same time upon you were talking about how investors view greece, yes, it's great for investors, but how is that knowing that you'll be underwriting greece, portugal and the rest of them. >> simon, let me universalize that more and i'm mindful that the greek solution is not a good solution. the public wage cuts are very
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small and they're raising tax rates. the business tax rates are going up and it is pure root canal that will probably make the deficit worse. simon, are they providing loan guarantees to save the euro currency? that's what i'm interested in. ultimately at the end of day, if the euro collapses, that is going to launch deflation across the world with the skyrocketing dollar. it's what we can't afford right now. does this guarantee the euro, simon? that's the question i'm asking. >> no, it doesn't, and i think that the answer here is all we're doing is within europe. we're undermining the fundamental reason why we like the euro in the first place which is why we believe in the packages which is the reason why we love the bundesbank and we loved germany 20 years ago. and when we bought french francs
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or italian lira? does it mean that people will fundamentally rethink the investments in the euro, absolutely. >> does it mean the euro trades down to $1.25, $1.15 and back to $1? does it mean that? >> i think it means it's definitely $1.25 and why not $1.50. that's an extreme call, but equilibrium level over the last decade for euro dollar is $115 and $117. all we're doing is removing the premium. >> i'm really glad that larry got to that issue because one of the big questions is whether or not there's still time to short the euro. anyway, we're going to move on here. we have investors that are feasting on restaurant reservation company open table. shares rising more than 18% on some upbeat earnings. we'll talk exclusively with the ceo about profits and the economy. >> also ahead -- >> by the way, larry, you got the nobel prize today, okay? >> thank you, trish, for
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heaven's sakes. >> that was a good question on the euro. >> also on "the call." fallout on toyota's troubles. are cars today just too over engineered? find out what our panelists think only here on "the call." what are you doing...? calling chase sapphire, seeing if we have enough points to stay longer. now? you don't have enough time... and you have to push all those buttons... no buttons, someone answers every time. yeah, right... bet you a massage... yeah, ok. hi, julie... i have a question about my points. hi, what button do i press for a massage? hello? new chase sapphire... you call. we answer. no waiting. just press right here... go to chase what matters.
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welcome back, everyone. toyota is not the only automaker with recall problems. honda says it will recall another 440,000 cars worldwide for faulty air bags. meantime, toyota facing further u.s. probes over its
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largest-ever safety crisis. so the question is could this whole mess be a result of over engineering modern calls? we want to bring in editor in chief of "driver tv." good to see you. when i got my new car it came with a manual about this thick and of course, i never read it. in fact, i take that back. i've had to read it on occasion because something very small has gone wrong, and i've had to pore through this manual going to the index, trying to figure out what's going on. it's really a nightmare, and these are little things that will go wrong in the car. do you think that we're at risk right now of over engineering these vehicles and making them just too complicated? >> well, there are certain parts of the car that probably could be simpler. a lot of the information technology that we have inside and this ability to hook up cell phones and to play all kinds of music, that's not necessary, but look at the demands we're
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putting on the cars. we all want better fuel economy, better exhaust emissions and good power. that requires technology. that requires a computer-controlled engineering system. we have modern systems like anti-lock brakes, stability control and traction control and all of those things require sophisticated technology. are we willing to give those up to have a simpler car? i don't think so. >> those are little thing, i'm talking about the lock not going down and the whole mechanics of the car really being thrown into orbit because you can't get the lock to go down. >> it goes berserk. >> the cars go berserk. there are people reporting that bmws, if the bmw electronic system goes down you can't get out of the car. it goes berserk. it's bolter gieft, csaba. i drive a bmw myself, and i've taken the time to figure it out. some of it is unnecessary. having a push button to stop and
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start the car. do you need that? no. >> it's an interesting sales point and they show you these kind of things and my thought is always, if it's controlled by computer it seems like there are more odds that it will go wrong and you can't fix it quickly if that's the case. is that a misperception? >> i think it is a misperception. computers themselves are reliable. in some cases it's complicated and has the code gone bad. it's not the computer that fails and it's the wiring that fails and there are a lot of complex electronics and think about something like stability control. this is a system that basically started about ten years ago and it can tell when you're going into a corner whether you're about to spin out or not and it will save your bacon. it is the most important and most effective safety device since the seat belt without a computer and without sophisticated electronics, you can't have it. is there too much information, more than i need to know, csaba? >> when i grew up i could hand crank my window down.
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>> i thought you would say you could crank the engine. >> good one, melissa. >> is all that putting the thing on overload? >> i don't know that it's putting it on overload. there's certainly a lot of information and a lot of it is optional. you don't have to order a navigation system and you don't have to get all of the electronic connections and you don't have to get the keyless ignition. that's all optional stuff and you can still buy a simple car if you want one. >> the bottom line is it will take you 40 hours to read through some of these manuals. >> i've never read a manual, trish. i have never read a manual. >> well, but you really do need to some in cases because just to figure out how to operate things. >> i know. >> and a simple thing when you do have the push button ignition a lot of these things won't turn off the engine for a couple of successes if you're at highway speeds and at this point maybe the manual needs to be put on a cd-rom and hire tom cruise to read it to you for people to do that. >> it sounds like we've all got
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some homework to do, then. >> i think so. >> thanks so much for joining us. >> they need cliff notes. didn't you have cliff notes in college. >> i did, you wouldn't adnight reading them. >> ooh, cliff notes. >> it's been a snowy couple of weeks here for the east coast and the washington, d.c., area getting hit with two feet of snow last week. wow, look at that live shot. i think that's the white house underneath that snow. >> what is that? >> we'll get the latest on just how bad this storm can be. it is the restaurant industry bouncing back. open table announcing a 31% revenue surge in the fourth quarter. that's open table. we will talk with the ceo in a cnbc exclusive right here on "the call," no global warming, just plenty of snow.
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hi, ellen! hi, ellen! hi, ellen! hi, ellen! we're going on a field trip to china! wow. [ chuckles ] when i was a kid, we -- we would just go to the -- the farm. [ cow moos ] [ laughter ] no, seriously, where are you guys going? ni hao! ni hao! ni hao! ni hao! ni hao! ni hao! ni hao! ni hao! ni hao! ni hao! ni hao! ni hao! [ female announcer ] the new classroom. see it. live it. share it. on the human network. cisco.
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manhattan doesn't look too bad. the second major snowstorm battling the east coast from washington to new york. government offices in washington shut down for the third consecutive day. weather channel meteorologist
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carfagno is tracking the storm and let's start with jen. >> can you believe this storm? we're calling it the february fuhry and the wind continues to come down and you almost don't know if it's going across or coming down. that's how strong these winds are. blizzard warnings in effect for the entire state of mary lann, delaware and most of south jersey. the new york city area, including long island and philadelphia, they extend down the appalachians. the snow has been falling here heavily in d.c. and baltimore. it has now picked up in philadelphia and we're seeing snow throughout delaware here. this is where some of the worst conditions are right now, just because of the wind and snow combination. today we'll watch the snow continue to pile up in new york city. the worst is yet to come in new york city and it's coming down in parts of new england including around boston. with this one we'll be getting anywhere from 8 to 12 inches of snow and boston, 6 to 12 more in new york city on top of what you're seeing this morning.
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3 to 5 more inches of snow on top of what you've already seen in washington, d.c., here, record snowiest winter in the d.c. we will head live to hampton and what are the conditions like live at the airport? anyone going in or out this morning? >> the short answer is no. all three major washington area airports, reagan national where we are, dulles and marshall near baltimore. what does a closed airport look like? well, first of all, there are no planes parked at the gates. the winds are howling even as the snowplows continue to shovel the gate areas and whatever. the departure and curbside baggage areas, deserted. ditto for empty ticket counters and security checkpoints, all shut down. airline stocks today have been trading down so far after yesterday posting their biggest one-day gains for the entire year. one analyst i talked to says all the airlines do factor in bad weather days in the winter
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including total flight cancellations. the shutdown here and at reagan and at bwi involves some 2,000 flights a day. if you add in philadelphia and another 1200 flights. all in all, shutting down mid atlantic commercial air travel for all practical purposes. back to you. >> all right, hampton. >> i wonder if hampton is riding around on the baggage carousel when they're not looking because there's no one there. >> he can get behind the counter and make his own tickets. >> sleigh bells ring. you're lonely, i'm worried about you. >> up next here on "the call." an online restaurant reservation service is dining on profits. open table and it's blowing past street expectations withst quarterly earnings and the stock is on fire today. >> what are the results telling us about consumer spending and the economy? we'll talk exclusively with the ceo. you're watching cnbc first in business worldwide. h
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welcome back to "the call." with your daily realty check i'm diana olick in washington. mortgage applications down 1.2% last week. refis were up 1.4%, but purchases fell 7% from the week before. refis now account for 70% of all
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applications as the 30-iary fixed fell below 1%. more than one in five single family homes with mortgages were urn water in q4 of 2009. some markets are seeing double dips in prices after a brief recovery. those include boston, atlanta and san diego. freddie mac will begin buying delinquent loans from securities pools and the agency now controlled by uncle sam said it would buy now loans 120 days past due. check back with the realty checkup next at 2:0. until then go to the blog, >> thanks, diana olick, we will. the online reservation provider reversed with a 14 cent gain as revenue surged 31%. the stock trading up as we speak. let's see if we have a stock chart we can show you. there you go, up nearly 20% at 4 bucks and 81 cents a share. joining us in a cnbc exclusive,
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jeffrey jordan, open table ceo. thanks for being on the program. >> it's a pleasure. thanks for having me. congratulations. i guess my big question is what is this suggesting about the economy overall. given that people have to be feeling fairly confident in order to go out to dinner. >> they do. we have a pretty good barometer of the economic activity because we manage restaurants' entire database of seat inventory and what we found is it's been relatively flat and depressed levels for the past 16 months. there is a slight bump in december where business was up this year over last year, but the quarter as a whole was only a slight pickup in economic activity in the restaurant partners. >> how is traffic different? are people going to less expensive restaurants? what differences in the patterns have you noticed? >> it's been interesting that there's been a lot of consistency across geographic markets, you know? the current customer accounts in
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aggregate at a restaurant partners are down 10% to 15% prior to the economic event and it's consistent across markets. what you do find is the popular restaurants often stay popular so the pain is often felt disproportionately among the rest of the restaurants other than those few hot ones. >> let me ask you a little bit about your growth strategy. you've really expanded your markets outside of these cosmopolitan areas. hold on to that thought. we've got breaking news on google. we want to head over to our correspondent jim goldman with that right now. trish, good morning to you. google, it looks like, is getting into the fiber optics network business on the company's blog, google is now confirming that they will be building and testing a fiber optics high-speed broadband network in several test cities around the united states and i've got to tell you, looking at the speeds that google is talking about, they are absolutely impressive. the company says they will will
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deliver internet speeds up to 100 times faster than what most americans have access to today with one gigabit per second speeds, this is a fbi tore home connection. the company plans to offer the service at a competitive price to at least 50,000 and up to 500,000 individuals as they roll out this particular network. google is talking with the fcc about various opportunities for this kind of network. right now the company is not saying specifically which markets this service will be available in. however the company is in the process of building out this technology and should have more details, but this is very good news for people who are interested in far higher speeds and a r of course, broadband and wireless access, such a huge issue right now. google says it will now try to tackle it on its own. back to you. >> jim gold mid-cap. thank you for that. we want to head back to the interview with the ceo with open table and let me ask you, what kind of growth, we were discussing earlier, what kind of growth is your company seeing now and how is it managing to
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grow in an economy that's pretty challenging? >> we have two ways we grow our business. one is we add more restaurants to our network. restaurants throw away their pen and paper book and manage their reservations on our computerized system which is what enables us to do the second part, offer online reservations to consumers. essentially, our product queries the database of every restaurant on our network. when you say i want to dine saturday night in manhattan for two at 7:00, we query every restaurant in our network in manhattan and return to you the availability of every restaurant for that query, and if you want, you can click confirmed online reservation with one click for free. so we're growing the restaurants and we're growing the diners. >> real quick because we only have 30 seconds left. what do you think about all of the president's comments on ceo compensation? you made a comment comparing ceos to baseball players who make a lot of money and don't
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make it into the world series and that outrages him as well. what do you think about the president's talk on ceo compensation as the ceo? >> you know, i -- i haven't really thought about it, to tell you the truth. i think i would like to believe that i'm a fairly compensated for the work i do and i work hard and try to and add value to our shareholders and to our customers. >> and maybe your shareholders know best. >> all right. jeff jordan, thanks sow much for joining us. i wish we had more time and that will do it for us here on "the call call ". i'm melissa francis. >> i'm trish regan. >> and aim larry kudlow and see you on "the kudlow report" at 7:00 p.m. eastern time and now "power lunch" is up next.
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